MORNING UPDATE BULLION - Bullion rebounded as worries over Europe's debt crisis leads to demand for wealth protection after the last session's sell-off on deflation worries and a lack of aggressive Federal Reserve stimulus. Inflation fears have helped fuel several years of strong gains for gold, but investors are starting to worry about deflation after reports this week showed signs of slowing economic activity around the world.

Crude ended up on short-covering as a potential storm threatened to disrupt oil production in the Gulf of Mexico. Natural gas ended with slight losses on profit booking after prices gains on speculation that potential tropical storm in Gulf of Mexico may disrupt production.

Base metals edged higher steadying along with global markets after slumping earlier in the week on worries about the health of the global economy. Friday's gains weren't enough to erase losses during the week, as global manufacturing data pointed to lower demand for the industrial metal.

GOLD MARKET UPDATE - Gold steadied after falling sharply from above $1600 earlier this week. The precious metal lost its hedge appeal when Federal Reserve officials said inflation remains in check despite historically low interest rates. Gold was helped today by another round of ominous economic data from the euro zone, where Germany's business sentiment weakened more than expected in June. Prices were edging higher over the course of the day, but gains accelerated after measures taken by the European Central Bank to ease collateral requirement for banks. Indian gold buying has been hurt by a bad monsoon season and a record low in the rupee, which pushed local gold prices to an all-time high. India's government's decision to double import duty on gold to 4 percent also weighed heavily. Gold imports to India, historically the world's largest buyer, fell by $6.2 billion in the first two months of the fiscal year that began in April, compared with a year before. Gold prices appeared underpinned a day after Moody's downgraded 15 of the credit ratings of world's bi ggest banks to reflect the risk of losses from volatile capital markets. Worries about the euro-zone debt crisis also supported g old. Now support for the gold is seen at 1562.25 and below could see a test of 1552.80. Resistance is now likely to be seen at 1577.30, a move above could see prices testing 1582.90.

Gold$ trading range for the day is 1563.2-1581.6.

Gold gains as worries over Europe's debt crisis leads to demand for wealth protection after the previous session's sell-off

Inflation fears have helped fuel several years of strong gains for gold, but investors are starting to worry about deflation

SELL GOLD$ @ 1578$ SL 1594$ TGT 1570$- 1564$

PROJECTION - Gold regained strength but was heading for its biggest weekly loss in a month after fears of a global economic slowdown hit commodities and prompted investors to seek safety in the U. S. dollar.

SILVER MARKET UPDATE - Silver futures regained strength on friday, rebounding off a two-week low as investors returned to the market to seek cheap valuations, but the precious metal ended the week sharply lower as traders unwound long positions after the Federal Reserve stopped short of launching a QE3. Silver recovered after the Fed announced that it was extending the current bond buying program, known as "Operation Twist", until the end of this year following its policy meeting. Under Operation Twist, the Fed sells short-dated Treasury instruments and buys longer dated Treasury's in tandem with the aim of pushing down long-term interest rates. Meanwhile, German Chancellor and the leaders of France, Italy and Spain agreed to push for a EUR130bn growth package for struggling euro zone economies at a EU summit beginning next week. Spain's deteriorating fiscal health remained in focus. The yield on Spanish 10-year bonds settled at 6.38% by close of trade, after surging to a euro-era high of 7.28%. In the week ahead, investors will be focusing on the upcoming EU summit amid growing expectations for progress on greater fiscal integration and allowing the bloc's rescue funds to buy government debt. Elsewhere, the US is to release official data on inflation, manufacturing output and new home sales. Now support for the silver is seen at 26.66 and below could see a test of 26.22. Resistance is now likely to be seen at 27.10, a move above could see prices testing 27.54.

Silver$ trading range for the day is 26.57-27.01.

Silver regained strength as investors return ed to the market to seek cheap valuations

Silver recovered after the Fed udpate that it was extending the current Bond program, known as "Operation Twist"

SELL SILVER$ @ 27.20$ SL 27.56$ TGT 26.60$

PROJECTION - Silver continued to come under selling pressure as traders unwound long positions after the Federal Reserve stopped short of launching a third round of quantitative easing.

CRUDE MARKET UDPATE - Crude oil charged back toward $80 a barrel trimming steep losses from the previous session despite deepening concerns about the health of the global economy. The U. S. National Hurricane Center said a low pressure system in the Gulf, home to 20 percent of U. S. oil production and 6 percent of natural gas output, had a 70 percent chance of developing into a tropical cyclone over the next two days. While oil demand prospects are dimming, supply of oil remains ample. The Organization of the Petroleum Exporting Countries is pumping about 1.6 million barrels per day ( bpd) more than the demand for its oil and its own supply target, OPEC figures show. Much of the extra oil has come from top exporter Saudi Arabia, as well as from anexport capacity expansion in Iraq and a recovery in Libyan output. At its meeting last week, OPEC agreed to keep its oil output limit at 30 million bpd, with several members urging the Saudis to cut back supplies to reach the target. Now support for the crude is seen at 78.11 and below could see a test of 76.66. Resistance is now likely to be seen at 80.68, a move above could see prices testing 81.80.

CRUDE $ trading range for the day is 76.66-81.8.

Crude ended up on short-covering as a potential storm threatened to disrupt oil production in the Gulf of Mexico.

In Gulf of Mexico, the largest U. S. offshore oil port began evacuating non-essential personnel from their operations ahead of potential cyclone

SELL CRUDE$ BELOW $79.20 SL $79.80 TGT $78.60-$78.20

PROJECTION - Crude steadied around $78 a barrel after sliding nearly 4 percent in the previous session to an ei ght-month low on weak economic data from China, the United States and the euro zone along with swelling crude oil supplies.